Seven Things Your Business Can't Live Without
These essentials are like food and water for your startup -- without them it will perish. Here's what you need to know.
Business is an art as well as a science. It's a matter ofpractical experience, judgment, foresight and luck. To besuccessful in business, you must master the basics of businesssuccess.
Fortunately, all business skills are learnable. You can learnanything you need to learn, to achieve any goal you can set foryourself. There are no limits--except the limits you place on yourown imagination.
There are three major reasons why businesses fail: lack ofmoney, lack of knowledge and lack of support. By mastering thebasics of business success, you'll gain the knowledge necessaryto acquire the support and money you need for your business.
So just what are the essentials of business success? There areseven key areas of activity that determine whether your businesswill live or die:
1. Marketing. Your ability to determine and sell theright product to the right customer at the right time
2. Finance. Your ability to acquire the money you need,and account for the money you receive
3. Production. Your ability to produce products andservices at a high enough level of quality and consistency overtime
4. Distribution. Your ability to get your product orservice to the market in a timely and economic fashion
5. Research and development. Your ability to continuallyinnovate and produce new products, services, processes andresponses to your competition
6. Regulation. Your ability to deal with the requirementsof government legislation at all levels
7. Labor. Your ability to find the people you need, dealwith unions, establish personnel policies, training andorganizational development
And from this list, comes the very specific, identifiablereasons for business success:
- Having a product or service that's well suited to the needsand requirements of the current market
- Developing a complete business plan before commencing businessoperations
- Conducting a complete market analysis before producing oroffering the product or service
- Thoroughly developing advertising, promotional and salesprograms
- Establishing tight financial controls, good budgetingpractices, accurate bookkeeping and accounting methods, all backedby an attitude of frugality
- Ensuring that there's a high degree of competence,capability and integrity on the part of key staff members
- Having good internal efficiency, time management, clear jobdescriptions, accompanied by clear and measurable output andresponsibilities
- Developing effective communication among the staff and anopen-door policy for managers, especially the business'sowner
- Generating strong momentum in the sales department and placinga continued emphasis on marketing your product or service
- Making concern for the customer a top priority at alltimes
- Putting determination, persistence and patience at the top ofthe list on the part of the business owners
And now that you know the seven essentials of business successand the identifiable factors involved in helping your companysucceed, let me share the top reasons for business failure.Thousands of companies were studied to determine the reasonsbusinesses fail. Here they are, in order of their importance:
- Lack of direction. Business owners often fail to establishclear goals and create plans to achieve those goals, especiallybefore starting out, when they fail to develop a complete businessplan before launching their company.
- Impatience. This occurs when business owners try to accomplishtoo much too soon, or expect to get results far faster than istruly possible. A good rule to remember is that everything coststwice as much and takes three times as long as expected.
- Greed. When entrepreneurs try to charge too much to make a lotof money in a short period of time, failure isn't farbehind.
- Taking action without thinking it through first. Anentrepreneur acts impetuously and makes costly mistakes thateventually cause the business to fail.
- Poor cost control. An entrepreneur spends too much, especiallyin the early stages, and spends all their startup capital moneybefore achieving profitability.
- Poor product quality. This makes it difficult to sell anddifficult to get repeat business.
- Insufficient working capital. An entrepreneur expects--andrequires--immediate, positive cash flow that doesn't occur,leading to the failure of the business.
- Bad or nonexistent budgeting. An entrepreneur fails to developwritten budgets for operations that include all possibleexpenses.
- Inadequate financial records. An entrepreneur fails to set up abookkeeping or accounting system from the beginning.
- Loss of momentum in the sales department. This leads to adecline in cash flow and the eventual collapse of theenterprise.
- Failure to anticipate market trends. An entrepreneurdoesn't recognize changes in demand, customer preferences orthe economic situation.
- Lack of managerial ability or experience. An entrepreneurdoesn't know or understand the important skills it takes to runa business.
- Indecisiveness. An entrepreneur is unable to make key decisionsin the face of difficulties, or decisions are delayed or improperlymade because of concern for the opinions or feelings of otherpeople.
- Bad human relations. Personal problems and conflict with staff,suppliers, creditors and customers can easily lead to businessfailure.
- Diffusion of effort. An entrepreneur tries to do too manythings, thus failing to set priorities and focus on high-valuetasks.
Business success isn't a mystery waiting to be solved.It's an attainable goal, if you simply avoid the reasons forbusiness failure and continually focus on improving the areas thatare responsible for business success.
Brian Tracy is the "Success Secrets" coach atEntrepreneur.com and one of America's leadingauthorities on entrepreneurial development. He's producedmore than 300 audio and video learning programs that cover theentire spectrum of human and corporate performance.
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